I am usually the first person to say something crass like "that child is too old to walk around with the pacifier"! But yet my son (who is 2) is allowed to carry his frog everywhere - and I do mean everywhere. Is there really a difference? Maybe, maybe not. My son uses his frog to comfort himself just like your granddaughter probably uses the pacifier to comfort herself. One just seems to be more accepted than another. So what do you do? Could you substitute the pacifier for something else - like a stuffed toy or something else that might be soothing for her?
We have had to stop letting my son take his frog to school because the other kids want it and it becomes a big fight. So now we have a ritual in the mornings where we say goodbye to frog before we leave for school. Then in the afternoons, I often tell my son that we are going home "to see frog" and it gets his attention faster than anything else! He doesn't cry for it at school any more; he got over that fairly quickly, actually, because he stays occupied with other activies. Perhaps that's your key - activity.
One of my friends had a child who loved their pacifier and she got rid of it simply by saying "we left it grandma's" - you'd have to choose another place. But knowing that she left it somewhere that she couldn't retrieve it seemed to work for her child. That was that, as a matter of fact. Maybe it could work for you too.